Weekly Letter to the President
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ofthisandthat.org. All rights
INAUGURATION, January 20, 2009
Drunk in its stale air
For two hundred years.
Fettered in mind and body,
The soul, the safe escape
To let me breathe the cries
Of my heart singing
Tears of mel-an-choly.
The tears flow free today
Washing the stains of blood
And sweat in brotherhood.
Raise the curtain then an'
Let the world look in
On this promised land --
We breathe free today.... almost.
--- Arshad M. Khan
We will be known forever by the tracks we leave.
--- Native American proverb
November 22, 2019 (posted November 29)
Mr. President: One of the very first investigative journalists, Ida Tarbell, went after the
"throttling hand" of Standard Oil and John D. Rockefeller. By 1880, the company
owned 90 percent of US oil, its transport and its sale.
Writing a series of articles over a two-year period, Tarbell's expose led to a Supreme
Court ruling in 1911 ordering the dissolution of Standard Oil -- so massive, it was
broken up into 34 corporations.
John D. Rockefeller who called the journalist Miss Tar Barrel -- echoes of Donald
Trump here -- was the country's first billionaire. If he spent his later years giving away
much of his fortune to found universities and fund research, he had been in his
younger days a ruthless competitor.
Monopolies controlling markets can set prices to their own liking. They can raise
them to increase income or cut them to stifle competition. In effect, they are
interfering with the free market forces so ardently espoused by University of Chicago
economists. On this issue conservatives and liberals have common ground, but the
question is what to do with monopolies. There is break-up and there is regulation.
Utilities are regulated but if one has been exposed to utility bills in many parts of the
country, one has to wonder how well. The renowned economist George Stigler in a
landmark study covering 60 years of electricity regulation (1900-1960), in regions with
varying degrees of regulatory oversight, found the differences in prices to be
negligible. The finding surprised economists, and it, added to Stigler's enormous
output, garnered him a Nobel Prize, the Nobel citation specifically noting the work.
If monopolies damage free-markets, there is an issue staring us in the face today:
the digital colossi Google, Facebook and the aptly named Amazon. Then there is
Apple with an iPhone monopoly. The market has been unable to check their
The University of Chicago's Stigler Center for the Study of the Economy and the State
has recently cast its gaze on the issue. A Stigler Center group headed by Yale
economist Fiona Scott Morton analyzed the market structure of these digital
behemoths. And last May she delivered its recommendation to the US Senate as part
of a hearing on digital advertising and competition policy.
It is an interesting case because far from extracting high prices from a hapless public,
two of the firms offer their products/services free, the third prides itself on the
cheapest prices, at-home shopping and convenient delivery. Apple is a more
conventional case holding sway over about 45 percent of cell phone users in the US
through proprietary hardware and software.
In such a diverse environment what could the study group come up with but a
regulatory body, a digital authority to regulate the industry -- and a supreme irony
given the major research finding of regulatory ineffectiveness from the man (George
Stigler) whose name heads the Center shepherding their effort. Other economists
also have been skeptical calling it the wrong tool to address a nonexistent problem.
Yet the problem is not difficult to see.
There is a chilling nature to these websites and platforms as they follow your surfing,
offering ads, purchase suggestions, other sites of interest, a looming presence
behind your right shoulder. Something is not quite right when so much power is
concentrated in so few corporations. Forget the invisible hand of free markets, there
is an invisible hand guiding your clicking finger.